Taxing the Postal Service?

Many international postal operators pay corporate income taxes to their national treasuries. Similar to a private company, these payments appear in the postal operators’ financial statements. Countries whose postal operators pay corporate income tax have essentially made a policy decision: They want their postal service to behave like a private business. This may not be surprising in solidly capitalist countries, such as the United Kingdom, Japan, or Taiwan, but many of these posts are from countries with long histories of centrally controlled economies, such as Armenia, Slovakia, and Croatia.

The concept of a corporate income tax is not entirely foreign to the U. S. Postal Service. The Postal Accountability and Enhancement Act requires the Postal Service to compute its assumed federal income tax on the income earned from its competitive products each year. Rather than paying that income tax to the Treasury, however, the Postal Service essentially pays itself. The money is transferred from the Competitive Products Fund to the Postal Service Fund, and can be used to fund the postal network as a whole.

Corporate income tax does not necessarily imply privatization either. The postal operators of Germany, the Netherlands, Malta, and Singapore all pay corporate income tax and all are publicly traded corporations. The remaining operators that pay corporate income taxes are, in essence, state-owned.

One advantage of the use of corporate income taxes is that the payments to the national treasury are tied to the financial performance of the postal operator. Corporate income tax payments decline during downturns in the business cycle and increase during periods of prosperity. Another advantage is the fact that these national governments have a stake in the sound financial management of their postal operators. In short, they have skin in the game.

What do you think? Should the Postal Service pay a corporate tax? Would such a tax encourage a more business-like approach to managing the Postal Service? Or does its public service mission and its current universal service obligations make a corporate income tax unworkable?

Comments (9)

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The Postal Service is not a business it's a service for the American people. There are more important thing than the bottom line and profit. The USPS is a cash cow for the federal government. They are draining billions a year from the post office funding retirees 75 years into the future. No one else is required to do that. the rich 1%ers want to privatize the post office and pay workers starvation wages and take all the profits for themselves. The post office should be a benefit for the whole nation-not just a few rich folks.

I think quite enough damage has been done to the Postal Service by HR6407 to fund 75 years of retiree health benefits in 10 at 5.5 Billion a year for 10 years without taxing a SERVICE that was founded to have income = expenses.
http://blog.uspsoig.gov/index.php/category/five-elements-of-a-postal-solution/

While the US Postal Service currently is not subject to corporate income tax, we do pay millions of dollars a year in property taxes on leased property - a little known fact.
I am not in favor of a corporate income tax unless we have complete autonomy from Congress. As long as we have politicians dictating how we operate, and oversight by the politically appointed PRC, it would be most certainly be to our disadvantage in the long run.

The ONLY thing the Federal Government has done to (NOT FOR) for the USPS and we mailers in the past is to steal from us.They look at us as free money that they can then spend elsewhere.Even if taxation initially came with more liberal postal reform legislation they eventually do not keep their promises.The annual payment of $29 Million for revenue foregone is a good example. They owed the USPS Billions and decided to pay it over many decades and each year they try to stiff the USPS by not intially appropriating the $29 Million. Would you buy a used car from Congress???

What a ridiculous idea. This would be similar to taxing a farmer for each raindrop that fell on his property.
We have shot ourselves in the foot too many times grasping at straws when we should leave some things unscrewed.
BTW, where is the dislike icon for this stupid article?

Most international postal operators are private, or semi-private. They are for profit corporations and therefore they should pay taxes.
The USPS is not for profit and should not be subject to being taxed. Furthermore, the USPS is not allowed to operate autonomously, as are other operators. Their hands are tied by Congress and until Congress gives them some space, they will continue to struggle.
When politicians get involved in making business decisions, the outcome is rarely favorable. Politics and business do not mix well as there are too many conflicts of interest.
Cheers,
Marc

The Fed Gov already steals billions of dollars from The USPS every year thru it's ridiculous pre-funding scheme &amp; scam. A corporate income tax would just be another way for The Feds to use The USPS as a cash cow.

The Postal service should pay taxes and then all the mail that the US gov now mails for free they can pay for. That would mean an average of several hundred thousand dollars in revenue for the Postal Service every year! Brilliant plan!

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